Competition Heats Up in Magnetic Stim Market
by James Cavuoto, editor
In the last 10 years, the market for transcranial magnetic stimulation systems has shifted dramatically from applications primarily in neurosensing and neuroscience research to neuromodulation therapy for psychiatric disorders. A host of new competitors has entered the market in recent years and the range of indications treatable by TMS is expanding rapidly.
At the recent meeting of the American Psychiatric Association in San Francisco, the show floor—once the exclusive domain of pharmaceutical companies—featured exhibits from market leader Neuronetics, as well as competitors BrainsWay, Magstim, MagVenture, and Nexstim. Each highlighted its unique advantages to the psychiatric community.
The advent of rTMS for treatment-resistant depression has been a financial boon to many psychiatry practices, as well as the neuromodulation industry. Psychiatrists stand to generate between $7,500 and $10,000 per patient in a typical treatment regimen that includes 20 to 30 sessions lasting 20 minutes each. In 2011, Neuronetics succeeded in obtaining Category 1 CPT codes from the AMA for rTMS treatment sessions. CMS currently pays about $120 per session, but private insurers, including Anthem, United, Aetna, Cigna, Humana, and others routinely pay two to three times that amount. Neuronetics recently announced that Japan’s Central Social Insurance Medical Council approved the recommendation by Japan’s Ministry of Health, Labour and Welfare expert review panel to provide reimbursement for its NeuroStar therapy. The initial reimbursement rate is ¥12,000 per session. NeuroStar obtained MHLW’s approval in 2017. The product is distributed in Japan by Teijin.
The worldwide market for magnetic stimulation systems is expected to exceed $100 million next year, according to The Market for Neurotechnology: 2018-2020. Neurotech Reports estimates that Neuronetics has about 60 percent market share. The company reported $53 million in sales in 2018 and guidance for 2019 is in the range of $62.5 to $64.5 million—a growth rate of about 20 percent. Interestingly, more than two-thirds of Neuronetics revenues come from treatment sessions, as opposed to system sales. That statistic may offer evidence that bioelectronic medicine therapies priced by the dose represents a viable economic model. Average up-front selling price for the system is in the range of $90 to $100K and the company has close to 1,000 systems installed. Neuronetics estimates that a typical practice can recoup their investment by treating about 12 patients.
For its part, BrainsWay offers its MDD customers three options: a direct purchase, which offers unlimited use, a lease, which incurs a fixed annual fee, and a risk share, which incurs both pay-per-use and annual fees. About half of their customer elect the lease option, which lasts up to four years. At APA, the company highlighted the advantages of its Deep TMS therapy, which can reach 1,8 to 3.5 cm in depth and offer more reliable targeting, according to BrainsWay. The company also highlighted that its position as the only vendor approved for treating OCD.
Down the road, BrainsWay is looking at new indications, including PTSD and opioid addiction. Their therapy was granted breakthrough device designation by the FDA.
At its booth, Magstim highlighted its FDA clearance for theta burst stimulation, which enables three-minute sessions.